Question

A skilled carpenter installed a roof on a new administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $2,300 for this service if not donated. What entry should the not-for-profit make

Answer 1

Answer and Explanation:

The journal entry should the not for profit make is given below;

Capital Expenditures $2,300

Contribution revenue $2,300

(Being the capital expenditure is recorded)

here the capital expenditure is debited as it increased the expenses and credited the contribution revenue as it also increased the revenue